Spain's government re-approves two housing decrees rejected in Congress, ahead of the November election

Decrees back before the vote

Pedro Sánchez's government has approved again two royal decrees on housing, for the second time, after Congress rejected them last Friday. The executive is using the dissolution of the Cortes to send the texts to the Diputación Permanente, which must accept them before 14 November. Sánchez called general elections for Sunday 29 November. Economist Gonzalo Bernardos accused the government of trying to approve "two decree-laws through the back door" in a post on social media.

The package extends rental contracts by up to two years on an extraordinary basis, limits rent updates and suspends until 31 December 2030 the evictions of vulnerable people with no housing alternative. It also restricts real estate speculation, tightens rules on seasonal and per-room rentals, and offers tax incentives to owners who offer affordable prices, along with deductions for tenants. According to laSexta, the measures also make it harder for vulture funds to buy homes.

Small landlords push back

According to data from the Ministry of Social Rights, Consumption and 2030 Agenda, prepared with the CSIC, 83.1% of rental homes in Spain belong to individuals. In Córdoba, José Vaquero, president of the Asociación de Agencias Inmobiliarias de Córdoba (Asaicor), says small owners with one to ten properties make up most of the rental supply in the province, "95% or 96%" by his estimate. He describes his sector as worried about the government's moves.

The markets are starting to stop, an important social alarm is going to be created and it is going to be a problem of significant size in the short or medium term.

Bernardos argues the new rules raise the risk of renting, reduce profitability and push landlords to pull homes off the market. He advises owners to leave their homes empty until legal certainty returns. Vaquero says the decrees are making the situation worse by putting the burden of a social problem on small owners who rely on rent for their daily expenses.

Public concern in the CIS survey

A study by the Centro de Investigaciones Sociológicos (CIS), based on more than 6,000 interviews conducted in June, found that 87% of Spaniards are worried about the housing situation a lot or quite a lot. Concern reaches 93% among those aged 25 to 34. Overall, 42% say the situation is harming them personally.

The share who feel harmed rises sharply among the young. It is 56.1% for those aged 18 to 24 and 68% for those aged 25 to 34, while 57.2% of those aged 35 to 44 say the same. Around four in ten respondents up to age 54 still report personal harm. Eurostat puts the average age of emancipation in Spain at 30.

Who collects the price

Fernando Trías de Bes, on Cadena COPE, uses a hypothetical new home that costs 400,000 euros. The builder pays about 100,000 euros for the land and about 150,000 euros for construction. Adding VAT on materials, municipal licences and worker contributions, the state keeps about 148,000 euros, roughly a third of the value. He says the builder, which takes on the full economic risk and spends several years on construction, earns a profit of about 12%.

Trías de Bes says the state also collects tax on the interest income banks earn from mortgages. Across all homes sold in Spain in a year, he puts state revenue from real estate at close to 40,000 million euros, about 10% of its annual revenue.

Supply and the structural debate

Valeria Racu, spokesperson for the Sindicato de Inquilinas, argues that building more homes is not enough on its own.

Building without changing the rules of the game is like filling a bathtub without putting in the plug.

Racu cites a Banco de España estimate that 750,000 homes are missing, and 900,000 homes held by non-resident foreigners for tourist use. Social housing makes up 3.4% of the total in Spain, against 8% in Europe and 29% in the Netherlands.

José García Montalvo, professor at Universitat Pompeu Fabra, says the state could not build the affordable housing Spain needs alone, and that a mechanism is needed so builders do not lose money. He says building affordable rental housing in Barcelona, Madrid or other large cities is essentially building at a loss. Javier Gil, a researcher at the CSIC, says the profitability of rental housing comes from legislation.

It is a super profitable business, but because there is legislation that makes it easy.

Ministry data cited by laSexta show that 56.4% of rental homes in Madrid belong to landlords who own several properties. Javier Montalvo, professor of economics at Universitat Pompeu Fabra, does not believe owners coordinate prices, saying rents rise because there is a shortage of supply.